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Cambridge Silicon Radio today launched its BlueCore2 ROM chip and denied claims that Bluetooth wireless technology has been overhyped.

“We shipped seven million Bluetooth-enabled devices last year, so all the talk about Bluetooth being overhyped is really not correct,” said CSR chief executive John Hodgson.

“2001 was slow, but things have picked up dramatically and we now predict that around half a billion devices will be sold by 2005,” added Hodgson.

CSR insists there has never been such a wide range of Bluetooth-enabled devices available, with Bluetooth telematics (in-car devices) set to be the next big thing.

The BlueCore2 ROM chip is half the physical size (just 6x8mm) of the company’s current BlueCore2 chip while its communication range of 20 metres is twice that of the original. The built-in flash and voltage regulator, which were previously separate, account for the smaller dimensions of the new chip. New software applications can be quickly added to the ROM memory.

But some analysts and industry insiders have expressed their concern over the competition from Wi-Fi (802.11b), which works across a similar spectrum to Bluetooth and transfers data more quickly and over a great distance.

“The two technologies, in our opinion, do not compete and instead should be viewed as two applications which run alongside one another,” said Glen Collinson, co-founder and sales director of CSR. “Wi-Fi should be viewed as the ethernet and Bluetooth as the USB port, with both allowing access to similar services.”

Sony has released already a new Vaio laptop in Japan that incorporates both Wi-Fi and Bluetooth technologies. Similar devices are expected to be launched in the UK later this year. Toshiba has also announced a laptop that has the option to include both wireless technologies.

IMS Research believes the primary drivers for Bluetooth will be voice application, telematics and, on the consumer side, laptops.

“Our research showed the barriers to Bluetooth were cost (52 per cent), ease of use (38 per cent and interoperability (29 per cent). Very few mentioned technical issues, which again shows a huge improvement from 2001,” said IMSR analyst Matthew Towers.

CSR is currently responsible for Bluetooth chips in 57 per cent of all products on the market, including those manufactured by LG, Samsung and Siemens.